Research in Motion misses its first quarter earnings target and cuts its outlook slightly. Palm has a hit with the Centro, but continues to disappoint. And Sony Ericsson sees a rough second quarter on "moderating demand of mid-to-high end mobile phones, in combination with a delay of new products shipped during the quarter."
Welcome to the new reality in the smartphone market--picky customers, rough economic sledding and features that no longer warrant a few extra dollars.
While RIM, Palm and Sony Ericsson aren't exactly comparable their relative stumbles do indicate that there may be more leverage for IT buyers. Handset makers are being squeezed and you might as well join in the fun. RIM vs. Apple's iPhone. Palm vs. Motorola. Penny saving commodity devices vs. gadget lust. The actual scorecard doesn't matter. It all adds up to leverage for buyers of all flavors as these parties battle for market share and increasingly discount their wares. Meanwhile, the discounting will escalate if customers balk at those pricey smartphones.
Let's go around the horn:
Also see: RIM’s Balsillie: ‘Not religious’ about form factors; B2B the company’s coreAdd these three aforementioned earnings reports up and you come away with the following truisms:
The platform game is the biggest reason why Nokia bought the rest of Symbian. Nokia last week bought Symbian and then donated it to a Symbian Foundation, which includes partners Motorola and Sony Ericsson among others. Nokia saw the platform writing on the wall: Without Symbian Nokia could have been in a hardware pickle as efforts like the Open Handset Alliance's Android and the LiMo Foundation get traction. Ed Burnette handicaps the winners and losers in the Symbian deal:
Palm, and to a lesser extent RIM (Blackberry), will feel the pinch from the revitalized Symbian, the iPhone, and Android platforms. I wouldn’t be surprised to see these two players jump on one of the other bandwagons at some point; perhaps Palm to LiMo and RIM to Android.
Handicapping the field
So what should we make of all these moving parts? Simply put, a lot of these devices are going to have a "me-too" feel to them. Sure carriers will customize the user experience a bit, but Apple and RIM may be the only two that are actually differentiated. Apple because of its software and design. RIM because of its enterprise leverage. Here's a look at the field.
Apple: The 3G iPhone will move units because it has an enthusiastic customer base that will continue to buy the latest from Apple. That's powerful. Meanwhile, international expansion and enterprise interest keeps Apple rolling.
RIM: RIM isn't going anywhere and will maintain its share and strength. In the enterprise, RIM is entrenched. In the consumer market, RIM is pretty interesting. As far as buzz goes, look for RIM and Apple to be the leaders.
Nokia: Was the Symbian deal savvy or desperate? Time will tell, but there are a lot of financial types saying that Nokia shares are a value. Nokia is a big dog globally and has a nice mix of high-priced and low-priced devices. It sure would be nice if Nokia were more of a player in the U.S.
Palm: It's a bit depressing when Palm's big plan is a refreshed Treo line powered by Windows Mobile. There are a ton of devices powered by Windows Mobile. Where's the differentiation? And that's the problem. There is little to differentiate Palm's devices--except for Centro's price. That's not a great model.
Sony Ericsson: This device maker moves a lot of units and has some Walkman mojo courtesy of Sony. However, the company will have an increasingly difficult time differentiating itself.
Samsung and LG: Both are big. Both can be trendy. And both can play the price game.
Motorola: No groundbreaking designs. Commodity handsets. Still decent market share. Even when Motorola spins off the handset division it's questionable whether the unit can stand alone.Simply put, the rules are changing rapidly. Platforms are in. The land grab is on. Smartphone vendors will be squeezed. And all this competition should result in more leverage for buyers.